Indigenous Shipowners May Get FG’s Nod to Lift Crude Oil
Shipowners and other stakeholders in the maritime sector are on the verge of getting the desired change in trade terms from Free On Board (FOB) to Cost Insurance and Freight (CIF) which would enable them to begin crude oil lifting.
This was a fall out from the stakeholders’ engagement on changing Nigeria’s crude oil affreightment trade term from FOB to CIF which was organised by the Nigerian National Petroleum Corporation (NNPC) and the Nigerian Maritime Administration and Safety (NIMASA) on Tuesday at the NNPC towers in Abuja.
The Minister of State for Petroleum Dr. Ibe Kachikwu who declared the event open welcomed the development, noting that the issue on this trade term is an aged long challenge that had lingered too long and charged participants to come out with resounding resolutions that would be of National benefit.
The Director General of NIMASA, Dr. Dakuku Peterside, who presented a paper titled, ‘The Imperatives of Changing Nigeria’s Crude Oil Affreightment Trade Terms From FOB to CIF’, pointed out that the changing landscape of Nigeria’s maritime sector viz-a-viz its security architecture, capacity and other determinants has necessitated the change now than ever before.
Dakuku stated further that the CIF if implemented, “will encourage indigenous fleet expansion, lead to massive job creation for qualified Nigerian Seafarers, create opportunities for mandatory sea time experience for Nigerian cadets and build expertise and competence in international shipping trade.”
According to him, “Nigeria is one of the major exporters of oil and gas resource in the world, and she averages an output of 1.92 million barrels of crude oil per day so this volume generates huge freight for carriers. Regrettably, Indigenous shipping operators have insignificant share of the freight earned from the carriage of Nigeria’s crude compared to foreign counterparts”, the DG lamented.
Dakuku also stated that OPEC nations such as Iran, Indonesia, Algeria, Kuwait, Angola, Venezuela, UAE and Libya allow indigenous operators to participate actively
in shipment of the crude oil, stating that with the right policies in place Nigeria can build its own capacity and one of this is the change of terms of trade for Nigeria’s benefit.
Also speaking at the event, the Group Managing Director of the NNPC Dr. Maikanti Baru stated that the Corporation does not have any reason not to allow Nigerians lift crude that there were conditions which made NNPC opt for the FOB trade. He however noted that the NNPC also sees benefits in the CIF trade term but processes have to be followed which may include transition period before finally opting for the CIF trade term.
Shipowners and major stakeholders who spoke at the engagement lauded the initiative.
A former DG of NIMASA, Barr. Temisan Omatseye, who is also a Ship owner pointed out that there is a lot of benefit in the CIF trade term. He stated further that that it would eliminate crude theft, create employment and ultimately compliment the diversification drive of the Federal Government.